Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The owner of the truck wishes to have a profitability of 2.5% per month, therefore he requests the following information: 1. Project the financial cash

image text in transcribed

The owner of the truck wishes to have a profitability of 2.5% per month, therefore he requests the following information:

1. Project the financial cash flow and calculate the NPV and the IRR

2. Determine the behavior of the NPV before changes in the discount rate equivalent to 0.5% (graph the NPV curve)

INPUTS VALUE 450 000 000 PARAMETERS initial investment FINANCIAL SALVATION OBSERVATIONS 80.0% from the initial investment ACPM PRICE INSURANCE 8 750 3.5% PER GALLON FROM THE VALUE IN BOOKS (EARLY YEARS TRIPS FOR MONTH TRAVEL COST 15 3570 000 dollars EXPENSES: 550 000 DRIVER SALARY 2.5% FROM THE TRUCK'S GROSS INCOME DRIVER COMMISSION (has a salary connotation) GENERAL EXPENSES ACPM CONSUMPTION 'Legal benefits are paid 12 500 000 75 MONTHLY (TIRES, TAXES, ETC.) GALLONS PER TRIP TRIP VALUE GENERAL EXPENSES ACPM PRICE SALARIES INCREASES: 7.0% 3.0% 0.5% 6.0% annual biannual monthly annual SECURITY AND SOCIAL BENEFITS (As % of salary) SECURITY AND BENEFITS PAID MONTHLY SECURITY AND BENEFITS PAID SEMESTRALLY SECURITY AND BENEFITS PAID ANNUALLY 28.00% 8.33% 13.00% The owner of the truck wishes to have a profitability of 2.5% per month, therefore he requests the following information: 1. Project the financial cash flow and calculate the NPV and the IRR 2. Determine the behavior of the NPV before changes in the discount rate equivalent to 0.5% (graph the NPV curve) INPUTS VALUE 450 000 000 PARAMETERS initial investment FINANCIAL SALVATION OBSERVATIONS 80.0% from the initial investment ACPM PRICE INSURANCE 8 750 3.5% PER GALLON FROM THE VALUE IN BOOKS (EARLY YEARS TRIPS FOR MONTH TRAVEL COST 15 3570 000 dollars EXPENSES: 550 000 DRIVER SALARY 2.5% FROM THE TRUCK'S GROSS INCOME DRIVER COMMISSION (has a salary connotation) GENERAL EXPENSES ACPM CONSUMPTION 'Legal benefits are paid 12 500 000 75 MONTHLY (TIRES, TAXES, ETC.) GALLONS PER TRIP TRIP VALUE GENERAL EXPENSES ACPM PRICE SALARIES INCREASES: 7.0% 3.0% 0.5% 6.0% annual biannual monthly annual SECURITY AND SOCIAL BENEFITS (As % of salary) SECURITY AND BENEFITS PAID MONTHLY SECURITY AND BENEFITS PAID SEMESTRALLY SECURITY AND BENEFITS PAID ANNUALLY 28.00% 8.33% 13.00% The owner of the truck wishes to have a profitability of 2.5% per month, therefore he requests the following information: 1. Project the financial cash flow and calculate the NPV and the IRR 2. Determine the behavior of the NPV before changes in the discount rate equivalent to 0.5% (graph the NPV curve)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Financial Management

Authors: James Van Horne, John Wachowicz

13th Revised Edition

978-0273713630, 273713639

More Books

Students also viewed these Finance questions

Question

Where does the supply of labor come from?

Answered: 1 week ago